Commentary: Housing Succeeds as Economic Development Becomes an Afterthought

My view: Chancellor understands the need to partner with Davis on housing, but not innovation

A commenter yesterday made an interesting point that bears more scrutiny. Some people have chosen to analyze the impact of UC Davis from a predatory perspective. UC Davis, they argue, has made choices to grow, especially by adding out-of-state students, which imposes costs on the city of Davis.

I have often argued that the city has a net benefit from the university. After all, the university is the major economic engine, not just in Davis but across the region. They hire a tremendous number of people and drive the economy. Some have argued that, without the university, Davis would simply mirror Dixon or other small towns in the region.

But this poster made an interesting point that Davis owes UCD a lot of its uniqueness and value “because the rest of the state taxpayers finance a major university in our midst.” From that standpoint, there is a ton of state revenue coming into Davis and thus the notion that UC Davis should mitigate its impacts on the community seems misplaced.

The poster argued: “In return, we have an obligation to accept the students that the state has assigned to our campus. UCD is not a major corporation–it is a government institution that benefits all of us. We are not in a position to impose growth controls that ‘close the gate’ because that means obstructing opportunities for others elsewhere in the state.”

With that said, it was obvious that the university was going to have to expand their student housing well above where they have traditionally provided
in Davis. The current percentage is 29 percent of students housed on campus. The upgrade to 8500 beds puts that number up at 46 percent.

That is a vast improvement. Critics of the university, along with opponents of city housing growth, have often correctly argued that UC Davis has the lowest or second lowest percentage of housing on campus in the UC system. That is a source of frustration for many in the community, who believe it is time for UC Davis to do more.

However, at the same time, I think from UC Davis’ perspective Davis has always been a community that is relatively small without real barriers to growth other than community opposition. This isn’t a geographically-bound community like some in the Bay Area. This isn’t a city that bumps up against other cities like a Berkeley.

If you look at the growth patterns at UC Davis and the city of Davis, up until 2000, they grew together. And so what is really happening here is a change in the ecosystem. UC Davis has been slow to adapt, but so too has the community.

The comments by Chancellor Gary May the past week demonstrate the extent to which he gets it on the housing front.

The chancellor in his announcement indicated that he was encouraged by the city council’s recent approval of housing developments in Davis. It is clear that behind the scenes the announcement was the result of the campus and city leaders working together to get to a real solution here.

He said, “Providing a greater abundance and diversity of housing should help ease some pressure on the Davis housing market.”

That’s the key. As we have pointed out, with the new additional 2200 beds, we have a real chance to get our vacancy rate into an area where it is workable and no longer problematic for renters.

My point of frustration, however, is that while we have made real progress on student housing – a real crisis – we have not made progress on economic development, and our relationship with the university appears headed in the wrong direction there.

In their strategic plan, entitled “To Boldly Go,” the chancellor talked about the need “to raise the profile of the university.” A big part of that is “stronger engagements (with) the city of Sacramento around innovation.

“This idea of Aggie Square will certainly have some appearance in the plan in some form,” Chancellor May said. “The idea there is for the university to partner with the City (of Sacramento) to engage with the business community and do a better job of taking the many wonderful ideas that come out of the laboratory and get it to the marketplace. One of the main motivations for doing (this) is economic development and job creation. I always thought that innovation (was) one of the most important and sustainable ways to create new industries, new jobs and new opportunities for not only our students but the region and the community.”

It is hard to blame the chancellor for looking to Sacramento and certainly nothing prevents Davis from launching its own initiative with the university along this front. I suspect if we plan it and build it, the university will joyfully applaud it.

Some leaders in this community even see this as a positive for Davis, believing that some companies will want a Davis address and to headquarter in Davis. One leader told me that this is the best hope for Davis at this point.

The university ignores the fiscal condition of its host community, over the long term, at its own risk, one of my readers pointed out to me last month. The prospects for Davis are limited, given the ecosystem within which we operate and the mentality of the community.

Still, it seems that the council has been much more willing to engage and do battle on housing – a necessary fight. They are planning perhaps as soon as June to make another foray into Measure R territory.

At the same time, they will be willing to engage in some sort of battle for revenue.

But what we don’t have at this point is a viable economic development strategy. Right now, Davis resembles a community running out of options. The build-out of the city is nearing completion. At this point, the city is relying heavily on infill and density to attempt to stave off the housing crisis and, without sizable plots of land to develop, the dispersed innovation strategy developed eight years ago is doomed to failure.

We have seen the leadership and the drive for housing and even the revenue measures, but really, since 2014, economic development at the city level has slipped.

So if Gary May sees Sacramento as the future, who can blame him. Sacramento seems to understand something at this point that we do not, as the Bee put it in an op-ed last month: “Cities need jobs. Companies need research and development infrastructure and an educated work force. University researchers need places to scale and market their innovations.”

But Davis doesn’t see it that way. Too many residents have their jobs and are not looking to the future. Too many residents are retired or about to retire.

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

67 thoughts on “Commentary: Housing Succeeds as Economic Development Becomes an Afterthought”

From article: “The poster argued: “In return, we have an obligation to accept the students that the state has assigned to our campus.”

Again, most of the growth is due to UC’s pursuit of full-tuition, non-resident students (as if UCD was a private university).

From article: “The chancellor in his announcement indicated that he was encouraged by the city council’s recent approval of housing developments in Davis. It is clear that behind the scenes the announcement was the result of the campus and city leaders working together to get to a real solution here.”

Are there informal/unofficial “deals” going on, between the city and UCD (e.g., regarding how much of UCD’s growth will be approved by/within the city)?

From article: “My point of frustration, however, is that while we have made real progress on student housing – a real crisis – we have not made progress on economic development, and our relationship with the university appears headed in the wrong direction there.”

I didn’t realize that I had that much authority, regarding what is done with the Nishi site.

Perhaps you should reconsider your support of the current proposal, and advocate instead for the type of commercial development that you’re (now) repeating the need for. (Perhaps something even better – from your point of view – than Nishi 1.0.) Perhaps air quality studies will then also be conducted, to determine if housing can be included.

I have taken on the role of back up moderator. I have not had to pull a single post yet. I am writing because I do not see name calling directed at an individual poster as in alignment with Vanguard policy. I would encourage you to refresh yourself on this policy since it may have changed since you were last posting.

I will address (what I believe) to be Jeff’s underlying point/criticism.

If access issues can be addressed (e.g., via access that’s proposed for Nishi 2.0) or via some other combination of methods, I suspect that a revised Nishi with commercial activities might have broader support.

Plus, if “development forces” (including the Vanguard) are going to constantly advocate for more development outside of city boundaries, I’d rather see them focus on the most obvious (and “least sprawling”) large site (which is also conveniently located next to UCD). As noted in the article, it seems that UCD has an agenda that might coincide with that idea, as well.

David has previously noted a dense development adjacent to another UC (on a much smaller site), which he has compared to the Nishi site. In the meantime, air quality studies could be done, to definitively determine the suitability of the site for the inclusion of housing.

In addition, a revised Nishi might also help the developer to pay for the significant infrastructure improvements that are needed for access (which would occur even under the current proposal, if approved).

In short, it’s time to shoot for something better (for all interests), at Nishi. Before it’s too late.

Tend to agree… any CC decision is subject to referendum… as to Wildhorse, the approval and DA was put up to referendum, ‘from the people’… on ballot, failed, so Wildhorse exists.

Was never convinced that either J or R were “needed”, as there were/are other “remedies”… Measure J/R is a lazy person remedy/prophylactic, in my opinion…

The fact is, if the details of a ballot prop is ambiguous, a significant segment votes “no”… ironically, a ‘conservative’ response… often makes the difference in a contentious matter… if Measure R was re-worded, that it was more like “shall this project be rejected?”, wonder if the outcomes would change. Where a “no vote” meant approval… I just don’t know…

Is calling someone who repeatedly says they are OK with development on the UC Campus or in Woodland but Not In My BackYard a “NIMBY” “name calling”? How about referring to a Medical Doctor as a “MD” or a member of the Grand Old Party as a “GOP” voter?

Ken: The goal regarding campus housing is primarily to densify sites that are already slated for development, and to ensure that UCD is responsible for the costs/impacts of its own plans. (And hopefully, to provide long-term stability/cost control, for student renters.)

Personally, I’m even less happy about what surrounding communities do. But, even in Davis, development forces are quite strong and loud. In addition, some believe them.

This is a rather glib comment which does not differentiate between community opposition based on objective concerns ( such as appropriate use of valuable ag land) and community opposition based solely on personal preference.

“After all, the university is the major economic engine, not just in Davis but across the region. They hire a tremendous number of people and drive the economy.”

You acknowledge the role of UCD as a driver not only of Davis economy but also of its regional role in this paragraph, and yet frequently have argued that we should attempt to keep the financial benefits of UCD confined here within Davis. I maintain that small start ups as off shoots from the university are very good fits for the Davis community. Large manufacturing & similar projects would be a better fit for Sacramento in my view. This was one are of agreement between former Chancellor Katehi and myself. Just as the medical school was more appropriately located in Sacramento, so would be other large scale enterprises. Chancellor May seems to have a similar broad, regional perspective for the university.

David needs to remember that if we have more development (of homes, apartments office or retail) it will help the “community” but it will hurt the value of the homes, apartments office and retail already built (so most owners of homes apartments, office and retail tend to oppose any new development in town)…

Davis has prime farmland surrounding it (as do some Bay Area communities, that have chosen to preserve theirs, as well.) Even though most have far more significant housing costs. And yet, there seems to be far less “complaints” about preserving farm/ranchland in those communities (e.g., Marin).

Some will continue to push for converting “just a little more – this time”, until it’s eventually significantly diminished. (Especially since other nearby communities value it even less, than Davis.)

All while traffic, water shortages, and other impacts will continue to worsen, around Davis and beyond.

Welcome to the Sacramento valley’s future, which is already showing these signs. Really, a pattern that’s being repeated throughout California and in many areas throughout the country.

In Marin (and elsewhere in the Bay Area), much of the preserved land is also not prime farmland. Much of it is also ranchland, which I believe is less productive than most farmland.

Apparently, folks in Marin, Sonoma county and elsewhere realize that there’s other reasons to not develop every square inch of the county, even for land that’s privately held. (Sometimes, conservation easements are used, which benefit the owners while preserving the land for its current use. This applies in Yolo county, as well.)

I am guessing that many of those people against any and all development near their back yard… even as they say they are not (must not use any labels that might be upsetting)… have their house isituated on prime farmland.

But hey, they were here before those other people that might move here.

But I was here before many of them moved here.

So maybe I should be allowed to tell them to give back their house so we can make it back into prime farmland.

They should accept this assuming they are really serious about the value of all that prime farmland being prime farmland… and not just using the argument to block more development.

Partly because I was thinking of the MRIC site. The other reason is that I did not initially note that other counties (e.g., Marin, Sonoma) often preserve sites that are not necessarily prime farmland. Apparently, they nevertheless understand and recognize the value of doing so, as I subsequently noted. (Even though housing is generally much more expensive compared to Davis, in those counties.)

So, you seem to claim “eminent domain” on what you consider ‘prime ag’? Is your property on what was/is prime ag? If so, would you have that retroactively considered ‘the people’s property’? Is your property “the people’s”?

Shall we compensate those folk who have undeveloped prime ag land for keeping it as such? [State and Federal constitutions might consider that (constraining the use of property) a “taking”] Are you willing to pony up the money, on an ad valorem basis (we are talking about values of property) to pay your share? Lump sum or 30 year mortgage?

Howard: I have no idea why you’re bringing up eminent domain. The land I’m referring to is, and has been, zoned for agriculture. Some landowners also participate in the Williamson Act, which ensures that the land is taxed at its farmland value, vs. a higher value.

At times, landowners are willing to go a step further, and sell their potential development rights (e.g., to a land trust, or for mitigation when another parcel is developed). That is probably the highest level of protection possible, for privately-owned land.

And frankly, if there’s “profit” to be had (from conversion of farmland for residential usage), the largest share (by far) usually goes to the owner/developer.

Do you realize how wealthy some developers are? Seems like you don’t, since you rarely mention that. (No, not necessarily the developer commenters on the Vanguard.) I’m thinking of the folks who convinced all of us to pay for levees in Natomas, for example.

And, I understand that some of those guys are still working behind the scenes, beyond that. I believe that they have other significant land holdings, near Davis and beyond. One of them is quite well-known, actually.

There are “outs” to Williamson Act. There is no prohibition for seeking “up-zoning” [no obligation for an agency to approve, but they mustmake “findings”].

Pretty sure your property was once zoned Ag.

Since your property was likely Ag, got zoned for residential, if it was prime Ag, why should a future developer be deprived of what your developer[you know those evil, profit-motivated folk] was granted [and you have benefitted from]? Just not getting your logic, except, “I’ve got mine, to **** with others”…

~ 30% of Covell Village was/is FAR from prime Ag… pretty much 80% of the land lying above Channel A…

If you “preserve” land by legislative fiat, it is ostensibly a ‘taking’.

You’re asking me why future developers should be prevented from profiting from conversion of agricultural land, for residential usage?

Actually, I didn’t say that. But, I’m not sure why any community would have a “goal” of converting agricultural land, for developer profit.

You’re taking it a step beyond reality, by suggesting (totally “out-of-the-blue”) that maintaining zoning is a “taking” of value. That’s patently absurd. And if anything, the opposite has occurred, throughout history. (See example above, regarding taxpayer-funded levees so that Natomas could be developed.)

Within Davis (and just about anyplace else), see ANY example in which short or long-term costs to the community are not sufficiently offset by development revenues/fees. (Hint – it’s not difficult to find, as repeatedly noted on this site.)

The answer to your question is yes, it was once zoned as agricultural land. Yes, I’ve benefited from having a home.

Taking it a step further, no – I don’t think it’s a good goal to endlessly/indefinitely convert more land for housing.

Taking it even further than that: it’s one thing to remove existing houses, it’s an entirely different matter to not build them. However, if the land under my house wasn’t converted for housing at one time, then we probably wouldn’t be having this fine conversation, today. (But, I doubt that I’d be dead, and probably not even any worse-off.)

But, your comparison to what a developer does is not the same thing. I provided a more applicable comparison that a single-family homeowner might request (regarding zoning changes), above.

“My suggestions have always been focused however on the need to capture more of those benefits for our community.”

I think this may be a distinction without a difference. If we are “capturing” more of those “benefits” ( defined in this case as money) here, that means that one of our surrounding communities is not “capturing” those funds. What it does not address is aspects of value which would not be measured in terms of money. The more nebulous “city character” which you say would not be affected….yet I am not convinced. Cities with large manufacturing, in my experience, do have a different character from those that do not.

Howard: I believe that Tia might be referring to the “enormous/promised” windfalls to local governments (via taxes), which are touted as a reason to convert peripheral agricultural land for commercial usage, for example.

I’m sure you’re familiar with this, as it has been, and will be promised again. Soon. (Even as existing industrial/commercial sites are converted to housing, Nishi’s commercial component has been removed, and no developer is apparently willing to step forward with a commercial proposal, without including housing.) All while surrounding communities are not exactly “swimming” in such offers, either. (None that I’m aware of without housing, once again.)

And, the county wants its own “piece of the pie”, as well. (Not to mention the limited taxes that the city receives in the first place, from any development.)

Hmm. The evidence for a commercial savior is looking weaker, all the time. Now, if you want another peripheral housing development (which “might” eventually include a promised/future commercial component, to make it more “palatable”), now we’re talking! Heck, it might even receive financing, that way. (But, I suspect that voters will see right through it, for the most part.)

Any time you go through a formal goal-setting exercise, you will learn that it is not uncommon for the action items that lead toward one goal to be somewhat counterproductive to other goals. So a basic principle is that you need to prioritize. And you need to identify whether goals involve short-, medium-, or long-range planning and implement your action items accordingly.

The question I ask in that situation is: who is harmed by the action or inaction with respect to a particular goal?

The absolute top priority at this time in the city of Davis is provision of more rental housing. It is the short- and medium-term issue on which the council needs to focus. People are being harmed materially and significantly by the inaction of the city over the last 15+ years and the failure to plan with the university on this issue.

Economic development is obviously important to the long-term fiscal health of the city. I agree that the city seems to have gotten off track, but the core planning documents from the peripheral/innovation park task force still pertain, and the three remaining development sites are still available. Our new city manager is fully conversant with the projects and the sites, and can direct staff to move expeditiously toward getting proposals, moving them forward, and shepherding the process. Nishi was a relatively small part of the process. Movement on MRIC, re-starting the northwest site, looking at 5th Street redevelopment, and possibly reviewing other developable sites in the city that were identified by the task force.

Nishi is off the table for commercial. A viable housing proposal has been brought forward for that site and it will address our most pressing current need. The fact that it no longer will be part of the strategy for commercial development does not detract from its value in providing housing in a desperately tight market. We need to stop putting obstacles in front of every project that comes forward for private development.

David: It was considered for inclusion of commercial development last year. Pretty sure that you remember that. And, since that time, I recall that even you have noted (more than once) that you’d prefer some commercial development at that site.

It might ultimately even need more development (than the current proposal includes), just to help pay for the infrastructure needed to access the site. (I understand that this isn’t fully calculated, at this point.) Who knows, perhaps the developer would just sell it (before proceeding with any development), even if the current proposal is approved. (It certainly would increase it’s sales value to have an approval, though.)

Ron really doesn’t want to discuss things like the Studio 30 report or the Dispersed Innovation Strategy. It would address many of his points on this subject, which I believe to be faulty in their grounding.

What some here seem to lose sight of, is that the only ‘options’ that the City can consider are the ones presented by the owners of the property. There is only one project on the table for the Nishi property and therefore only one option the City should be evaluating. There is no comparison shopping with development projects unless the City owns the land.

What the City can do however is create incentives for developers to build the types of projects that the City wants, primarily through reducing the costs of those projects. This is something the City has done previously to encourage mixed-use development proposals. If the City made it less expensive to build a commercial-only development, we would likely see more proposals along those lines. This is another example of what the City might do to encourage economic development.

Different people in town will have different things as their “absolute top priority”

One business owner may say “stopping a similar business from opening in town” while another will say “more apartments in town for my workers”. Many local apartment owners (as seen by the No on NISHI signs in front of many of their offices) will say stopping apartment development as will the older cat ladies in town renting their drafty converted garage to grad students for $1,000 a month (since they know if there are lots more nice apartments there will be less people willing to pay $1,000 to rent a drafty garage in a home with six cats and four litter boxes)…

But what we don’t have at this point is a viable economic development strategy.

It will be interesting to see what kind of economic development strategies the various City Council candidates have in mind. So, far, I’ve only heard Mark West talk specifically about how to encourage economic development and growth.

Direct democracy tends to weaken procedures and intermediary layers that otherwise exist in tried and true decision protocol. This results in a lack of a filtering of messages and opinions, and thus leaves room for manipulation from an emotional, and not rational, basis.

And with no process for adjustment, we end up with binary “pass vs fail”, “yes vs no” decisions. And they will be tyrannical in nature.

Humans are wired for criticism and change aversion expect with clear and immediate benefits… only a minority is capable of true visionary leadership. Education attainment does not matter here… except to give the risk-averse non-visionary greater rhetorical skills to influence self-serving results.

People also don’t have time to immerse themselves sufficiently into many topics that would require their immersion in order to be qualified in opinion. The need to provide consistent and quality information to the public is fraught with significant challenges… including dealing with wide-spread propaganda and misinformation flung by anyone with an agenda.

Hierarchical and representative decision-making structures exist for a good reason… without it we would lack true progress.

With direct democracy, due to the absence of a correcting mechanism the impulsive public will overpower public welfare; eventually causing opportunities to slip by and eventually destroying from this sub-optimized approach to governance.

Davis is being destroyed by Measure R. Direct democracy does not work.

Jeff… as much as I tend to agree with many of your views, have to agree with Ron… the “shareholder” model makes sense… but shareholders delegate most decisions to Corporate (so, you also are more than somewhat right)… but shareholders accept Corporate’s judgement, unless they appeal/challenge.

Shareholders do not dictate Corporate’s actions… they do have “right of refusal”… and the ability to replace Corporate officers…

The City of Davis is, by California Law, a Municipal Corporation… connect the dots (directed at everyone, not just Jeff, but at all)…

Correct as written, but neatly dodges the fact that we do vote on local taxes. Do you believe that the CC should be able to set without our vote ? For parcel taxes? For utilities taxes ? For soda taxes?

Come on over to my place and I will be happy to show you in person. Note, I am not opposing the Lincoln40, but I challenge you, after a visit, to maintain that it will not hurt the value ( as measured in ability to maintain as a single family residence) of my home.

Come on over to my place and I will be happy to show you in person. Note, I am not opposing the Lincoln40, but I challenge you, after a visit, to maintain that it will not hurt the value ( as measured in ability to maintain as a single family residence) of my home.

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